Attributing the worst fall of Gross Development Product (GDP) to the pre-GST destocking, the Union Finance Minister Arun Jaitley has recently assured a seven per cent rise in the economy soon.Expressing his concern over the worst economy growth reported in the last three years, Jaitley said that the manufacturing sector
While the Economic Survey had estimated a growth of 6.75 per cent to 7.5 per cent for 2017-18, latest report by the Central Statistics Office (CSO) revealed that the economy registered merely 5.7 per cent growth in April-June (Quarter 1) of 2017-18, much slower than the 7.9 Per cent recorded in the first quarter of 2016-17.
“Global economy is improving faster than what we thought and that is a positive trend. The domestic public investment is certainly going to be quite high because the revenue trend seems to be positive,” the Minister added.
“On the same rationale, with reforms continuing, the confidence in the economy globally being high, the FDI (inflow) will continue. The monsoon overall — the bigger picture — looks to be good and therefore that should send a positive impact,” he explained.
“Another area of possibility is, are we able to get early successes for the banking system for the insolvency itself,” he said.
Describing the first quarter GDP steep fall as a matter of concern, the finance minister said the government has to work towards policy and investment betterment for improving the figures.
The detailed analysis further reveals that while the agriculture segment is reporting a normal range, the manufacturing industry declined to 1.6 per cent from 3.1 per cent.Holding the rollout of the Goods and Services Tax (GST) responsible for fall in the manufacturing industry, the minister said that the investment and services have reported improved figures.
“Since it was announced that GST would come into operation from July 1, most manufacturers were de-stocking during period April-June. As a result, trading went up because sales were taking place but it was stocks which were being sold. No new manufacturing happened,” he said.